ZURICH (AFP) – Swiss pharmaceuticals giant Novartis said yesterday that the sale of its stake in a joint venture with Britain’s GlaxoSmithKlein helped boost net profit last year by 64 per cent.
Novartis said in a statement that it had raked in a net profit of USD12.6 billion for 2018, including a USD5.7 net gain on its exit from the consumer healthcare joint venture it created with GSK in 2015.
Sales came in at USD51.9 billion – up six per cent from a year earlier but just missing forecasts of analysts polled by Swiss financial news wire AWP, who had anticipated USD52.1 billion.
Following the news, Novartis saw its share price slip 1.38 per cent in mid-morning trading to 84.48 Swiss francs as the Swiss stock exchange’s main SMI index was basically flat.
Novartis Chief Vas Narasimhan hailed the results as evidence that the company’s strategic shift since he took the reins early last year was paying off.
“In 2018 we re-imagined Novartis,” he said in the statement. “We took major steps towards becoming a medicines company that focusses its capital on developing, launching, and creating global access to breakthrough medicines,” he said.
“Together with delivering strong accretive growth, we also advanced our strategic priorities including building new advanced therapy platforms, ramping up productivity and digital efforts, and creating a new culture,” he added.
In addition to cutting loose Novartis’ stake in the GSK joint venture, the company has since Narasimhan’s arrival made a large acquisition in the genetic therapy realm, opened discussions on selling off its Alcon eye care unit and announced thousands of upcoming job cuts in Switzerland and Britain.
In 2018, the group’s two blockbuster drugs, Cosentyx for psoriasis and its Entresto heart treatment, along with its cancer medications, helped push its pharmaceutical division sales eight per cent higher to USD34.5 billion, the company said.
Alcon, which Novartis said it aimed to part with during the first quarter of 2019, meanwhile, saw sales rise six per cent last year to USD7.1 billion, while Sandoz, its generic drug arm, saw sales dwindle two per cent, to USD9.9 billion, amid heavy pricing pressure in the United States (US).
For 2019, Novartis said it expected to see overall sales continue to rise by around five per cent, while its operating profit should grow between one and five per cent.